The Effect of Emigration on Wages: Evidence From Central and Eastern Europe

Sandra Spirovska , University of Wisconsin-Madison

This paper estimates the short–run net effect of emigration on real gross monthly earnings in 10 Central and Eastern European countries by estimating a simple structural factor demand model. The model assumes that workers across education, workers within education and across age, and workers within education–age groups and across gender are imperfect substitutes. I find that the large emigration occurring due to EU accession increases average wages as much as 3.5%. In most countries, these gains are concentrated among young and highly educated female and male workers, while workers with an intermediate level of education see negligible wage gains or even losses. Finally, female workers exhibit higher wage gains than men, which indicates a decrease in the gender wage gap as a result of emigration.

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 Presented in Session 7. Migration & Urbanization